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Iran war to cost UK households £2,400 by end of 2027, CEBR says
CEBR estimates the loss would come through higher energy bills and weaker real disposable income, totaling £70.4bn for households by mid-decade.
UK households are set to take a £2,400 financial hit on average by the end of 2027 from the Iran war, with the impact building through rising inflation and stagnant wage growth, according to analysis by the Centre for Economics and Business Research.
CEBR calculates that the conflict will knock £1,100 off the real income of the average UK household in 2026, followed by a further £1,300 in 2027. Overall, it estimates £70.4bn will be wiped from UK households, real disposable incomes, by the Middle East conflict.
The consultancy says the shock is transmitted through two channels, direct higher energy costs that feed into household bills and the prices of other goods, and borrowing costs that remain unchanged after the Bank of England was previously expected to cut rates.
CEBR senior economist Liam Daly warned that the squeeze will persist until energy markets calm, as UK energy bills are scheduled to rise in October after Ofgem lifted its quarterly price cap by 4%. A separate estimate from the Energy and Climate Intelligence Unit says higher wholesale oil and gas prices since Feb. 28 could add £9.8bn to UK energy and road transport costs, and that users face an extra £190m per week for each week the conflict continues.